What you should know about boards

Congratulations on your new company formation. If you have not done so already, one of the most important next steps will be building your team. In addition to the management team, you will also need people to sit on boards.

There are typically three kinds of boards: boards of directors, company advisory boards and founder personal advisory boards.

STARTUP BOARDS OF DIRECTORS

There are several good sources for this information including the?National Association of Corporate Directors?and?the Corporate Director's guidebook.

Here are some danger signs that the CEO may be faltering and what board members should do about it.

Here are some recent trends concerning board compensation.

Here is what you should know about startup boards.

Here is a toolkit for board members

STARTUP ADVISORY BOARDS

I've offered some advice to entrepreneurs?and?advisors?about advisory boards in the past.?

Here are some ideas on how to use your advisory board.

If you find yourself in this predicament, here are a few things to consider:

1. Advisory boards should include the starting team and some people on the bench who can be called into special situations or substitute for those who do not have the interest or expertise to help get the company to the next stage.

2. Anticipate that there will be turnover, so compensate advisory board members appropriately

3. Do not sever relationships with board members because they are no longer on the starting lineup. You may need to put them into the game later

4 Be sure to actively engage your members and keep them informed of the playbook. Otherwise, whey your starting QB gets hurt, the backup will know the playbook

5. Consider changing your relationship with advisors, possibly making them consultants or?members of the management team

6. Have clear benchmarks and timelines and make clear the resources necessary to attain them

7. Keep advisory updated so they know the playbook when called of the bench

8. Actively engage your advisors on a regularly scheduled basis, preferably quarterly

9. Fire and hire according to your needs

10. Coordinate efforts with the advisory team, the management team and the board of directors, realizing they each have a different role in the company

STARTUP FOUNDER PERSONAL ADVISORY BOARDS

Here are some stories from the WSJ about executives who have benefitted from their personal board of directors.

But, like working with, or being a member of any advisory board or board of directors, there are some pitfalls:

1. Start small. Find two or three people you know, like and trust and test the process
2. Be proactive in managing the PAB
3. PAB board members should serve on a temporary basis with renewable terms if things go well
4. Be specific at PAB meetings and create an agenda around specific problems you want to address.
5. Be sure the pros of serving on your PAB outweight the cons
6. You don't necessarily have to pay PAB members, you just must make them feel appreciated and that you value their time and expertise. Diversity is not the same as inclusion.
7. Schedule regularly held meetings and give a progress report
8. Add additional members on an ad hoc basis if your PAB members do not have the experience or domain expertise to help solve your problems
9. Be sure your PAB members represent demographic, cognitive, functional, generational, psychographic and functional diversity
10. Listen more than you talk and follow up on leads
11. Understand the difference between a coach, a mentor and a sponsor
12. Rotate members on a regular basis

You don't have to create all three at the same time. However, the time to create and tap into the wisdom and experience of your board members is usually before you need them or are willing to reach out for help. So, practice an ounce of prevention, build your networks and create your boards when the time is right.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs